Oklahoma Hospice Provider Settles False Claims Act Case

According to the Justice Department, hospice providers Good Shepherd Hospice, Inc.; Good Shepherd Hospice of Mid America, Inc.; Good Shepherd Hospice Wichita, L.L.C.; Good Shepherd Hospice Springfield, L.L.C.; and Good Shepherd Hospice – Dallas, L.L.C. d/b/a Compassionate Care (collectively “Good Shepherd”) have agreed to settle allegations that they violated the False Claims Act and Anti-Kickback Statute. Good Shepherd, headquartered in Oklahoma City, does not operate hospice facilities; rather, it provides hospice services to patients in the patients’ homes, in long-term care facilities, assisted living facilities, and nursing homes. According to its website, Good Shepherd has fifteen offices in Oklahoma, Missouri, Kansas, and Texas.

Hospice care is provided to patients who are terminally ill and are expected to have six months or less to live. It focuses on the relief of pain, symptoms, and stress, instead of on curing an illness. Once a Medicare or Medicaid patient begins receiving hospice care, he or she is no longer eligible to receive treatment intended to cure the terminal illness, prescription drugs to cure the illness (rather than pain medication), care in an emergency room or ambulance transportation.

In 2011, two former employees of Good Shepherd filed a whistleblower lawsuit under the qui tam provisions of the False Claims Act alleging that Good Shepherd knowingly submitted false claims to government health care programs for patients who were not terminally ill and did not meet the criteria for hospice care. According to the complaint, whistleblower Kathi Cordingley was the Executive Director of Good Shepherd’s Kansas City, Missouri, office from November 2010 until she left in April 2011. Whistleblower Tracy Jones was a registered nurse, also in its Kansas City, Missouri facility, from October 2010 until she was terminated in April 2011. In January 2015, Ms. Cordingley notified the federal court that Ms. Jones had passed away during the pendency of the case.

The whistleblowers alleged that Good Shepherd was engaging in the following wrongful conduct: (1) admitting patients who were not eligible for hospice care; (2) failing to follow plans of care for hospice patients as required by Medicare; (3) manipulating the Medicare cap on annual reimbursements to hospice care providers; and (4) paying various forms of unlawful remuneration to induce the referral of hospice patients in violation of the federal Anti-Kickback statute.

The complaint also alleged that Ms. Cordingley’s complaints about these fraudulent practices to her superiors were ignored, leading to her resignation. In addition, when Ms. Jones complained, Good Shepherd allegedly retaliated against her by terminating her employment.

According to the Justice Department, Good Shepherd has agreed to pay $4 million to resolve the allegations. It also agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services-Office of the Inspector General. The whistleblowers will be entitled to share in $680,000 of the settlement proceeds as their reward under the qui tam provisions of the False Claims Act.